Home Politics America Baltimore City Leaders Propose a 30% Tax on E-cigarettes

Baltimore City Leaders Propose a 30% Tax on E-cigarettes

Led by City Council President and Democratic nominee Brandon Scott, a proposal to set in place a 30% tax on the distribution of vaping products, was introduced during a recent routine city council meeting in Baltimore.

Diane Caruana

January 5, 2021

“The COVID-19 fiscal hit that we have taken, we have to be thinking about how we can generate revenue as a city,” said Scott. This bill establishes a 30% tax on the process. It also repeals our local tobacco tax.”

“E-cigarettes and cigarettes are economic substitutes. So, if you raise taxes on one product, you will increase use of the other.”

Economist Anirban Basu, CEO of the Sage Policy Group said that this tax would generate millions annually for the city. “The notion here is this would generate a few million dollars a year,” said Basu. However, he added, it is not the solution to the city’s problems.

Yet, Scott and other supporters of the proposed tax insist that it will reap health benefits. “If we can’t ban them we can sure tax them,” said Scott. On the other hand, tobacco harm reduction experts and vape advocates believe that such measures are actually counterproductive to public health.

“Taxing vapor products like combustible cigarettes for example is a move in the wrong direction, said Alex Clark, CEO of the Consumer Advocates for Smoke Free Alternatives Association (CASAA). “Increasing the cost of these products is likely to discourage people from switching to a smoke free alternative.”

Evidence from Minnesota

In line with Clark’s arguments, a recent study from Minnesota found that increased taxes on vaping products not only led to increased tobacco use, but also to a decrease in smoking cessation rates. “‘The impact of E-cig taxes on smoking rates: Evidence from Minnesota,’ found that taxing vaping products lead to an 8.1% increase in tobacco use and a smoking cessation decrease of 1.4%. It also concluded that if vapour products had not been taxed, an additional 32,400 adults would have quit smoking,” explained the Canadian Vaping Association (CVA) last year.

Moreover, the same patterns have been reflected by multiple other studies and also predicted by top economists ahead of the implementation of such measures. A 2019 study by the National Bureau of Economic Research found that “while cigarette taxes reduce cigarette use and e-cigarette taxes reduce e-cigarette use, they also have important interactions with each other”.

Michael Pesko, a health economist and assistant professor at Georgia State University, said in a related statement. “E-cigarettes and cigarettes are economic substitutes. So, if you raise taxes on one product, you will increase use of the other.”

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